The Embassy of the Democratic Socialist Republic of Sri Lanka
The Japan is Sri Lanka’s one of the important trading partners, accounting for 3.8% of Sri Lanka’s total trade in 2016 and absorbing 1.9% of Sri Lanka’s total exports.
In 2016, Japan was the Sri Lanka’s 9th export destination preceded by USA, UK, India, Germany, Italy, Belgium, UAE and the Netherland and 5th largest import source preceded by China, India, UAE and Singapore. Sri Lanka account for very minute percentage of total imports to Japanese market (around 600bn imports of Japan).
In 2016, Sri Lanka’s exports to Japan dominated by Apparel (22%), Tea (20%), Fish(7%), coir textile fiber (7%), insulated cables (3%), table and kitchenware (3%). In 2016, Sri Lanka’s imports from Japan are mainly comprised of motor vehicles and transport equipment (56%), medical or surgical equipment (5%), Self-propelled mechanical shovels, excavators and shovel loaders (3%) as well as parts of motor vehicles (2%)
From 2006 to 2014, Japan imports from Sri Lanka continue to expand and declining in both 2015 and 2016. The major reduction was due to the declining of crustaceans exports (-70%) to Japan.
During the visit of Hon. Prime Minister of Sri Lanka to Japan in October 2015, leaders decided to deepen cooperation in multifaceted fields under a “Comprehensive Partnership.” Considering the importance of economic growth and development of Sri Lanka, the two leaders decided to put particular focus on taking initiatives in (i) Promotion of Investment and Trade, (ii) Cooperation on the National Development Plan in Sri Lanka, and (iii) National Reconciliation and Peace building.
As mandated through the October Joint Declaration, the first Economic Policy Dialogue at the Senior Officials’ level was held in July 2016 to consider concrete measures for future enhancement of economic cooperation. Subsequent to this meeting, core groups from the two countries have established a Working Group to create a road map for Investment promotion to Sri Lanka.
Sri Lanka and Japan have entered into following bilateral instruments among other (Agreements/MoU) that has direct impact on trade and investment promotion.
Sri Lanka’s trade with Japan, which is considerable in value, has shown fluctuations during 2004 to 2016. The total trade turnover, which stood at US$ 566.4 Mn. in 2004, gradually increased to US$ 1,602 Mn. in 2015 and then it has decreased to US$ 1,150 Mnin last years. The balance of trade with Japan is unfavorable to Sri Lanka, due to imports of motor vehicles, in particular. The total trade has significantly dropped in 2009 due to the global recession.
(Values in US$ Mn.)
| Year | Exports | Growth % | Imports | Growth % | Total Trade Turnover | Balance |
|---|---|---|---|---|---|---|
| 2004 | 154.7 | 411.7 | 566.4 | -257.0 | ||
| 2005 | 142.5 | -7.8 | 379.7 | -7.8 | 522.2 | -237.2 |
| 2006 | 164.3 | 15.3 | 453.8 | 19.5 | 618.1 | -289.5 |
| 2007 | 161.7 | -1.6 | 413.4 | -8.9 | 575.1 | -251.7 |
| 2008 | 162.2 | 0.3 | 426.0 | 3 | 587.1 | -262.7 |
| 2009 | 140.6 | -13.3 | 223.9 | -47 | 364.5 | -83.3 |
| 2010 | 169.0 | 15.3 | 584.1 | 160 | 753.2 | -415.0 |
| 2011 | 203.9 | 20.7 | 1,024.6 | 75.4 | 1,228.5 | -820.6 |
| 2012 | 215.5 | 5.7 | 554.6 | -45.9 | 770.1 | -339.1 |
| 2013 | 224.0 | 3.9 | 670.2 | 20.8 | 894.2 | -446.2 |
| 2014 | 235.9 | 5.3 | 941.1 | 40.4 | 1,177.0 | -705.1 |
| 2015 | 213.7 | 9.4 | 1,389.2 | 47.6 | 1,602.9 | -1,175.5 |
| 2016 | 200.2 | -6.3 | 950.5 | -31.6 | 1,150.6 | -750.3 |
Source: Sri Lanka Customs
Sri Lanka and Japan have entered into following bilateral instruments among other (Agreements/MoU) that has direct impact on trade and investment promotion.
(Values in US$ Mn.)
| HS Code | Description | 2012 | 2013 | 2014 | 2015 | 2016 | Share %, 2016 |
|---|---|---|---|---|---|---|---|
| 61 and 62 | Apparel | 27.14 | 38.78 | 47.98 | 39.42 | 44.67 | 22.32 |
| 0902 | Tea | 50.20 | 48.41 | 49.56 | 42.49 | 42.70 | 21.33 |
| 0306 | Crustaceans, whether in shell or not, live, fresh, chilled, frozen, dried, salted or in brine ;cru.. | 10.72 | 17.75 | 21.34 | 12.36 | 14.60 | 7.29 |
| 530500 | Other vegetable textile fibres; paper yarn and wovan fabrics of paper yarn | 10.55 | 13.58 | 11.49 | 12.34 | 14.08 | 7.03 |
| 8544 | Insulated (including enamelled or anodised) wire, cable (including co-axial cable) and other insul.. | 3.36 | 3.89 | 7.42 | 7.15 | 6.78 | 3.39 |
| 6911 | Tableware, kitchenware, other household articles and toilet articles, of porcelain or china. .. | 5.75 | 5.34 | 6.53 | 6.28 | 5.10 | 2.55 |
| 401290 | Retreaded or used pneumatic tyres of rubber; solid or cushion tyres, inter-changeable tyre treads .. | 2.70 | 3.88 | 3.68 | 4.93 | 4.39 | 2.19 |
| 250610 | Quartz (other than natural sands); quartzite, whether or not roughly trimmed or merely cut, by saw.. | 3.55 | 5.28 | 5.23 | 4.13 | 4.25 | 2.12 |
| 4016 | Other articles of vulcanised rubber other than hard rubber. | 6.24 | 6.02 | 5.70 | 4.72 | 4.11 | 2.05 |
| 400129 | Crepe rubber | 5.22 | 5.84 | 5.22 | 4.39 | 3.84 | 1.92 |
| 3802 | Activated carbon; activated natural mineral products; animal black, including spent animal black. .. | 5.63 | 3.07 | 4.21 | 5.68 | 3.80 | 1.90 |
| 96031030 | Tawashi brushes made of 100% coconut fibre | 3.38 | 3.53 | 3.40 | 3.41 | 3.42 | 1.71 |
| 080111 | Desiccated Coconut | .04 | .02 | .21 | 2.16 | 3.18 | 1.59 |
| 20011020 | Gherkins preserved by vinegar/acetic acid | 3.29 | 3.18 | 2.91 | 2.53 | 3.06 | 1.53 |
| 90 | Optical, photographic, cinamatographic, measuring, checking, precision, medical or surgical instrument | 4.74 | 4.67 | 3.92 | 2.52 | 2.00 | 1.00 |
| Total | 215.50 | 224.00 | 235.98 | 213.7 | 200.15 | 100.00 |
Source: Sri Lanka Customs
(Values in US$ Mn.)
| HS Code | Description | 2012 | 2013 | 2014 | 2015 | 2016 | Share %, 2016 |
|---|---|---|---|---|---|---|---|
| 87032251 | Hybrid electric vehicles | 24.61 | 96.16 | 389.10 | 370.75 | 202.63 | 21.32 |
| 8703 | Motor cars and other motor vehicles principally designed for the transport of persons | 99.19 | 197.71 | 88.49 | 329.34 | 126.30 | 13.29 |
| 87032353 | Other hybrid electric vehicles | 12.60 | 51.99 | 93.33 | 128.62 | 83.56 | 8.79 |
| 8704 | Motor vehicles for the transport of goods | 86.58 | 34.56 | 45.66 | 169.49 | 73.14 | 7.70 |
| 8702 | Motor vehicles for the transport of ten or more persons, including the driver. | 15.27 | 7.59 | 13.51 | 37.19 | 55.16 | 5.80 |
| 90 | Optical, photographic, cinamatographic, measuring, checking, precision, medical or surgical instruments | 20.53 | 20.22 | 23.99 | 31.97 | 31.29 | 5.36 |
| 8429 | Self-propelled bulldozers, angledozers, graders, levellers, scrapers, mechanical shovels, excavators | 27.61 | 10.23 | 13.03 | 24.54 | 29.93 | 3.29 |
| 39 | Plastics and articles thereof | 19.46 | 20.46 | 13.83 | 16.83 | 20.20 | 3.15 |
| 8708 | Parts and accessories of the motor vehicles of heading nos. 87.01 to 87.05. | 17.54 | 16.51 | 13.47 | 15.92 | 19.73 | 2.13 |
| 8452 | Sewing machines, other than book-sewing machines of heading 84.40; furniture, bases and covers.. | 1.86 | 8.03 | 7.53 | 10.99 | 15.31 | 2.08 |
| 8504 | Electrical transformers, static converters (for example, rectifiers) and inductors. | .58 | .47 | .75 | .51 | 14.79 | 1.61 |
| 4002 | Synthetic rubber and factice derived from oils, in primary forms or in plates, sheets or strip; mi | 4.69 | 3.96 | 5.67 | 10.60 | 13.62 | 1.56 |
| 72 & 73 | Iron and Steel and articles thereof | 11.52 | 12.38 | 15.05 | 15.94 | 12.40 | 1.43 |
| 2523 | Portland cement, aluminous cement, slag cement supersulphate cement and similar hydraulic cement | 8.41 | 8.35 | .02 | 2.27 | 11.69 | 1.30 |
| Total | 554.61 | 670.21 | 941.11 | 1389.24 | 950.46 | 100.00 |
Source: Sri Lanka Customs
| Rank of Japan in Sri Lanka’s Trade | Share % | |
|---|---|---|
| Exports | 10 | 2.08 |
| Imports | 03 | 7.31 |
| Rank of Sri Lanka in Japan’s Trade | Share % | |
| Exports | 44 | 0.18 |
| Imports | 67 | 0.04 |
Source: Sri Lanka Customs, Trade Map
During the visit of Hon. Prime Minister of Sri Lanka to Japan in October 2015, leaders decided to deepen cooperation in multifaceted fields under a “Comprehensive Partnership.” Considering the importance of economic growth and development of Sri Lanka, the two leaders decided to put particular focus on taking initiatives in (i) Promotion of Investment and Trade, (ii) Cooperation on the National Development Plan in Sri Lanka, and (iii) National Reconciliation and Peace building.
As mandated through the October Joint Declaration, the first Economic Policy Dialogue at the Senior Officials’ level was held in July 2016 to consider concrete measures for future enhancement of economic cooperation. Subsequent to this meeting, core groups from the two countries have established a Working Group to create a road map for Investment promotion to Sri Lanka.
Japan’s Generalized System of Preferences (GSP) scheme grants preferential tariffs to certain developing countries under the Temporary Tariff Measures Law. Japan’s GSP started on 1 August 1971 and is effective until 31 March 2021. In 2001, Japan introduced various measures under its GSP Scheme, such as expanding the product coverage of tariff free, quota-free treatment for goods originating in LDCs. As a result, all textile and clothing products from LDCs enter Japan duty free.
The simple average GSP tariff rate is 4.9% (FY2012). Japan grants preferential tariffs under its GSP scheme to 138 developing countries including Sri Lanka for 337 agricultural and fishery products and 3,216 industrial products at HS nine-digit level. The GSP scheme excludes many agricultural products and certain industrial products.